Cost versus coverage

SACRAMENTO — Garrett Warren, 14, needs braces to fix the gaps in his teeth caused by a severe cleft lip and palate that have already required seven operations. But his family's insurance plan won't pay for them, though Warren's doctors say the braces are necessary before they can begin a final round of surgeries.

"It's so important for his whole treatment," said his mother, Becky. "Just because you hear the word braces or teeth doesn't mean it's dental."

As insurers try to limit their payouts and new treatments become available, patients are finding more gaps in what their medical policies will cover. As he considers 10 bills passed by the Legislature that would expand what insurers are required to pay for, Gov. Arnold Schwarzenegger must balance improved medical coverage -- for those who have it -- with the risk of driving costs so high that people can't afford it.

The new health coverage requirements include maternity services; tests for the HPV virus, which can cause cervical cancer; and treatment for most mental health and substance abuse problems. The broadest would enhance existing medical coverage for 18 million Californians. The narrowest would help a few hundred patients.

For example, about 300 people a year would benefit from the proposal that insurers cover orthodontia needed for cleft palate patients, increasing monthly premiums by a third of a cent.

But together, the new mandates would increase premiums by $383 million a year, or 0.5% of the $74 billion employers and individuals now pay to insurers each year, according to the California Health Benefits Review Program, a University of California office that analyzes such proposals for the Legislature. The premium increases affecting maternity and mental health mandates alone would prompt 3,200 people to drop their coverage, UC experts estimate.

Other proposals would require insurers to pay for screening for HIV in people without symptoms and for the cost of special formulas and foods for people whose digestive tracts can't absorb nutrients because of a rare genetic disorder. Two bills would compel insurers to offer the option of purchasing extra coverage for hearing aids for children and durable medical equipment such as wheelchairs.

Another bill would bar insurers from refusing to pay for the treatment of people who sustained injuries because they were impaired by drugs or alcohol. And one measure, to cover acupuncture, was vetoed by the governor last month.

Daniel Zingale, Schwarzenegger's senior advisor on healthcare, said the governor is looking at the bills warily after the Legislature rejected his proposals for overhauling the state's healthcare system, including Schwarzenegger's ideas for keeping costs down.

"There were hopes we would have a comprehensive package of prevention and cost-containment measures," Zingale said.

California already requires insurers to offer 44 benefits, more than most other states. They include various types of cancer screening and diagnosis and care for chronic diseases, including osteoporosis.

Not every policy has to include all 44. Although managed care plans are required to cover all medically necessary procedures, pared-down insurance plans that offer only catastrophic coverage to young, healthy adults have been proliferating in recent years.

Maternity coverage, for instance, has dwindled since 2004, when Schwarzenegger vetoed legislation to require that it be included in plans sold directly to consumers (group plans are compelled to offer it). In his veto message, Schwarzenegger cited its wide availability in that market.

But today only 26% of people with individual, rather than group, policies are covered for prenatal care and delivery. About 147,000 women of child-bearing age have insurance that lacks it.

Taxpayers sometimes have to pick up the costs for treatment that insurers refuse to pay for. The state has public healthcare programs for low- and moderate-income pregnant women and for children with serious health conditions whose family's income is less than $40,000.

"If health insurance doesn't cover this, then the taxpayers end up paying for it," said Beth Capell, a lobbyist for Health Access California, a nonprofit consumer group.

But adding maternity coverage to all policies that lack it would lead to premium increases of between 1% and 13%, depending on the age of the consumer, according to a UC report. It estimated that increased premiums would cause about 2,300 people -- primarily people in their 20s -- to drop their coverage and join California's 5 million uninsured.

In addition, the UC experts predicted that even if maternity coverage were required of all insurers, some women eligible for state pregnancy care would opt for it to avoid the deductibles and co-pays of private plans.